PRESS RELEASE
FOR RELEASE: FOR INFORMATION:
Valorem Law Group 312-676-5480
June 27, 2018 847-644-3003
On June 26, 2018, Corporate Tailgate Services Inc., dba Chicago Boat
Rentals (“CBR”), 1177 North Elston Avenue, Chicago, filed a lawsuit
against Chicago-based company GROUPON, Inc. (“Groupon”), alleging that
Groupon had defrauded CBR. The Complaint alleges that Groupon used a
fraudulent refund scheme in which it issued itself hundreds of thousands
of dollars worth of “refund credits” for purported refunds that were in
fact never refunded to customers. The Complaint alleges that “Groupon
presented the fabricated and false ‘refunds’ as legitimate refunds
actually given to purchasers, but in fact many of the refunds were
fabricated by Groupon and not given to purchasers. The fabricated
refunds that Groupon identified to CBR simply resulted in money that
rightly belonged to CBR being kept by Groupon itself.”
The Complaint outlines the approximately 5-year relationship that CBR
had with Groupon, in which Groupon sold discounted Groupon Vouchers to
CBR’s boat rental services. 20% of the money Groupon collected from
customers went to Groupon as a “service fee” under the parties’
agreement, and 80% was supposed to have gone to CBR for providing boat
rentals at discounted prices to Groupon customers. The Complaint notes
that for many sales, the sales proceeds were correctly divided 20%-80%.
For many other sales, however, the Complaint alleges, Groupon fabricated
that it had given refunds to customers and then deducted the amounts of
those purported refunds from money that it rightly owed to CBR. The
Complaint outlines one example where the customer purchased the Groupon
Voucher in April, redeemed the voucher to rent one of CBR’s boats in
July, only to have Groupon later assert that this customer had been
refunded in April, on the same day as his purchase, and withholding
CBR’s share of the customer’s purchase price from CBR. The Complaint
alleges that the customer never received any refund.
Describing the scheme as both “complex and difficult to uncover,” the
Complaint also alleges that Groupon took specific steps to cover up the
scheme when CBR brought it to Groupon’s attention in August 2017, and
then again in October 2017, including Groupon removing certain
questionable names and redemption numbers from Groupon’s “Dashboard,” an
online location where Groupon merchants may check the then-current
status of specific Groupon vouchers, customers, and/or redemption
numbers.
CBR’s Complaint seeks approximately $350,000 and $700,000 in punitive
damages against Groupon, as well as attorneys’ fees, costs,
pre-judgment interest, and post-judgment interest.
CBR’s outside legal counsel, Stuart Chanen, of Valorem Law Group, will
hold a press conference to answer questions on the lawsuit on Thursday
morning, at 9:30 a.m., at 218 N. Jefferson Street, Chicago, IL, Suite
300.